NEW YORK – Target is having an identity crisis.
The nation’s third-largest retailer was once high-flying, but now it’s struggling to find its place in the minds of American shoppers.
Once known for its cheap chic fashions and home accessories, Target faces competition from trendy chains like H&M. The discounter also hasn’t been able to ditch the image that its prices on staples like milk are higher than rivals like Wal-Mart. And it’s battling the fallout from a massive data breach that has hurt its reputation.
Meanwhile, Target last week fired the president of its Canadian operations after some missteps in that country. The ousting comes two weeks after the Minneapolis-based discounter announced it was looking for a new leader after the abrupt departure of its CEO.
All of the challenges come as the retail industry is dealing with a slow economic recovery that hasn’t benefited all Americans equally and a move by shoppers away from buying in stores and toward shopping online. As a result, Target reported its first annual profit decline in its latest fiscal year in five years.
The nature of the retail landscape has changed, said Brian Yarbrough, a consumer products analyst at Edward Jones. I don’t think Target has addressed the changes well.
Target was the first low-price retailer to team with designers to create affordable lines when it forged a partnership with Michael Graves in the late 1990s. But that niche has been copied by traditional stores and foreign imports like H&M. Analysts say Target took its eye off the ball when it focused on expanding its food business since the recession.
Target says it’s moving more quickly to test the latest items in stores. It also made personnel changes aimed at making it more nimble.
We’re getting back to what we were known for, said John Mulligan, Target’s chief financial officer and interim CEO.
Target has been pushing the Pay Less part of its slogan Expect More, Pay Less. Last year, it touted prices on products in holiday TV ads, the first time it had done in a decade.